Project partner innogy puts Triton Knoll at heart of its growth plans and calls for more details on future auctions to help secure ongoing cost reductions.

Triton Knoll Offshore Wind Farm was today delighted to confirm its success in the government’s latest Contracts for Difference (CfD) auction, confirming it as one of the UK’s best ‘low cost’ renewable energy projects.

Project joint owners innogy and Statkraft (1) said today’s success was excellent news for both consumers and the renewables industry, and called for more auctions in future to help secure the accelerating trend of cost reductions in offshore wind.

The circa 860MW(2) East coast project expects to trigger a capital expenditure investment of around £2billion into much needed UK energy infrastructure. This would enable the delivery of some of the lowest cost energy generation for consumers, as the cost of offshore wind continues to fall at an unprecedented rate and is well below nuclear(3) and cost-competitive with new gas-fired plant (4).

Following today’s auction success, Triton Knoll will now progress towards a financial investment decision likely in 2018 with full onshore construction starting shortly after, and offshore construction in 2020. First energy generation could be as early as mid-2021, with the project expecting to be fully operational in 2022.

For innogy, a 50% owner of Triton Knoll, the project’s auction success is a cornerstone of the company’s growth strategy.

Peter Terium, CEO of innogy SE, said: “I am very pleased that Triton Knoll has been successful in the latest UK auction. Together with our partner Statkraft, we have passed an important milestone on the way to realising our offshore wind power project and also proved that we can be successful in a very competitive market environment. A large proportion of our planned investment in growth is intended to flow into renewable energies. Together with our grid and retail businesses, they will make innogy the innovative, decentralised and sustainable energy company of the future.”

Christian Rynning-Tønnesen, Statkraft CEO, said: “We are delighted with the successful outcome for Triton Knoll in the CfD auction, which demonstrates the combined expertise of the two partners. As Europe’s largest generator of renewable energy, Statkraft plays a substantial role in driving forward developments in the renewables industry both in the UK and other markets around the world. Our strong partnership with innogy has helped bring forward a cost competitive project that represents value for UK consumers, alongside ensuring future energy security. Investors will now be invited into the project.”

Paul Cowling, innogy Director of Offshore Wind, said Triton Knoll’s auction success reinforced the downward trend of offshore wind costs, and called for more auctions in future.

He said: “Triton Knoll will provide low cost, clean sustainable energy for consumers and UK businesses, that is cheaper than nuclear and competitive with new build gas generation. Cost reduction is at the heart of offshore wind development and is accelerating faster than ever. The importance of offshore wind in the UK’s energy mix is now beyond doubt. Wind energy should be at the very core of UK Government’s energy policy and our long term energy security.

“With these price reductions achieved, we now look forward to Government announcing the dates for future auctions, to continue to drive further cost reductions both in offshore wind and across other technologies.”

James Cotter, Triton Knoll Project Director was delighted that the project, over 10 years in the making, can now progress with real certainty towards construction start and the delivery of low cost energy generation.

James said: “Triton Knoll will be one of the most cost effective wind energy projects in UK waters, delivering an expected minimum of at least 800,000 homes equivalent(2) of sustainable, renewable energy. It will benefit local and UK businesses as we aim to deliver around 50% UK content from our investment across the project’s lifecycle, and can help nurture skills for the future.

“Throughout, we’ve worked closely with our supply chain partners prior to our bid to ensure that, not only do we have a highly competitive project, but one that is highly deliverable and ready to go for the benefit of UK consumers. We will now progress towards financial closure in 2018 and construction start shortly after, and look forward to realising opportunities for regional and UK businesses, and to working closely with them in the months to come.”

Regionally, preparations for Triton Knoll’s start of onshore work are well underway, and a full programme of onshore survey works is being completed, while some key early works are being prepared to pave the way for construction later.

Triton Knoll is being developed as a joint venture between innogy (50%) and Statkraft (50%), with innogy managing the project on behalf of the partnership.(1)

The project will be located approximately 32km off the Lincolnshire coast and 50km off the coast of North Norfolk. It has consent to install almost 60 kilometres of onshore underground export cable, and a new substation near Bicker Fen.

Statkraft is a leading company in hydropower internationally and Europe’s largest generator of renewable energy. The Group produces hydropower, wind power, solar power, gas-fired power and district heating and is a global player in energy market operations. Statkraft has 3800 employees in more than 20 countries.

Since 2006, Statkraft has invested £1.4 billion in the UK’s renewable energy infrastructure and provided 2.5 GW of renewable energy Power Purchase Agreements (PPA’s) For further information about Statkraft visit www.statkraft.com

About innogy SE

innogy SE is Germany’s leading energy company, with revenue of around €44 billion (2016), more than 40,000 employees and activities in 16 countries across Europe. With its three business segments Grid & Infrastructure, Retail and Renewables, innogy addresses the requirements of a modern, decarbonised, decentralised and digital energy world. Its activities focus on its

23 million customers, and on offering them innovative and sustainable products and services which enable them to use energy more efficiently and improve their quality of life. The key markets are Germany, the United Kingdom, the Netherlands and Belgium, as well as several countries in Central Eastern and South Eastern Europe, especially the Czech Republic, Hungary and Poland. In renewable power generation, the company is also active in other regions, e.g. Spain, Italy and the MENA region (Middle East, North Africa), with a total capacity of 3.7 gigawatts. As a leader of innovation in future-oriented fields like eMobility, we are represented in the international hot-spots of the technology industry such as Silicon Valley, Tel Aviv, London and Berlin. We combine the extensive expertise of our energy technicians and engineers with digital technology partners, from start-ups to major corporates. With planned capital investments of around €6.5- €7.0 billion (2017-2019), we are building the power market of the future and driving forward the transformation of the energy market.

innogy is colourful, flexible and full of energy – let’s innogize!

Renewables

With an installed capacity of more than 900 megawatts in offshore wind and with over 1900 megawatts in onshore wind, innogy is one of the major operators in Europe. We plan, build and operate plants to generate power and extract energy from renewable sources. Our aim is to take the expansion of renewables in Europe further in the short term, both on our own and working with partners. We believe that working together in this way is the key to making the energy transition a success. Currently, we are particularly strongly represented in our home market, Germany, followed by the United Kingdom, Spain, the Netherlands and Poland. At the moment we are focusing on continuing to expand our activities in onshore and offshore wind power. We are also looking at entering new markets and technologies, such as large-scale photovoltaic plants.

It is estimated that the average annual generation expected at the site could be equivalent to the approximate domestic needs of an expected minimum of 800,000 average UK households.

Energy predicted to be generated by the proposal is derived using wind speeds monitored in the local area and correlated with long term reference data. The energy capture predicted and hence derived homes equivalent figure may change as further data are gathered.

Equivalent homes supplied is based on an annual electricity consumption per home of 4100 kWh. This figure is supported by recent domestic electricity consumption data available from The Digest of UK Energy Statistics and household figures from the UK National Statistics Authority.”

(3) Nuclear generation costs

The new nuclear plant at Hinkley Point is priced at £92.50/MWh and contracted to deliver in 2025 although was recently reportedly delayed until first delivery in 2027.

(4) Levelised Cost of Energy (LCOE)

The latest BEIS figures show new build gas to be £66/MWh (2020) with that cost expected to rise to £99/MWh by 2030. The same analysis shows the cost of offshore wind falling rapidly, and today’s auction shows it is falling and at a faster rate than Government predicted.

Offshore wind has already exceeded its LCOE 2020 target of £106/p MW four years ahead of schedule and expected to fall to £96MWh by 2030. At the same time gas is expected to rise to £99/MWh by 2030.

The third annual Cost Reduction Monitoring Framework (CRMF) was delivered in January 2017 by ORE Catapult and shows that:

the cost of energy from offshore wind has fallen by 32% since 2012 and is now below the joint UK Government and industry target of £100/MWh four years ahead of schedule.

there is high industry confidence of continued rapid cost reduction to below levels set by any other large-scale, low-carbon energy source.

Offshore wind costs have fallen sharply through the adoption of larger turbines, increased competition and lower cost of capital. Projects were reaching a Final Investment Decision (FID) in 2015/16 with an average Levelised Cost of Energy (LCOE) of £97/MWh, compared to £142/MWh in 2010/11.

Makes a good comparison, because it is closer to like for like (it is the cost to generate a unit of energy over the lifetime of the project).

Consents

In July 2013, the Secretary of State granted consent for the offshore array element of the project (turbines, offshore substations, inter array cables etc). In September 2016, the Secretary of State also granted a Development Consent Order (DCO) for the Electrical System (ES) which connects the power generated from the offshore array into the national grid onshore. The ES consent includes the offshore export cable, the onshore underground export cable, an intermediate electrical compound at Orby, and a new substation at Bicker Fen, ultimately ensuring the delivery of energy potentially into an anticipated 800,000 UK homes once the wind farm is fully operational.

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